The committee decided, for the second time, that the best option to address the crumbling, 100-year-old City Hall is to build a new hall in the adjacent parking lot.

The committee first decided in August to recommend building a new City Hall in the parking lot on the corner of Albion and Fulton streets. But it decided this winter to reexamine its options after Tom Dickinson offered to lease his downtown warehouse to the city for $1 a month.

But the warehouse would have required $1.3 million to renovate and $41,000 in utilities over five years, according to Eppstein Uhen Architects. A new building would cost about $1.2 million and $20,000 over five years in utilities.

Residents strongly favored building new rather than remodeling the Dickinson building, Mayor Erik Thompson said. It doesn't make sense to replace an old building with an even older one, he said.

"It was evident that the Dickinson warehouse was a bad idea for a variety of reasons," he said.

The committee also started a discussion on financing Wednesday.

The city tries to pay about $400,000 to $425,000 on debt each year to finance capital projects, Flanigan said. If it takes out a 20-year, $1.2 million loan, it can continue to do that without raising taxes, she said.

The city will finish paying off its Fulton Street/Highway 59 construction project in 2012, further lightening its debt load, she said.

The city wouldn't necessarily have to take out a loan for the entire $1.2 million, Thompson said. It could use savings, sell other city properties or use part or all of a $467,000 payout.

The city is eligible to pay itself back $467,000 for land it bought to form the Edgerton Business Park in 1995.

Thompson also has suggested building a new City Hall in two phases. The architects estimated the city could build office and storage space for about $913,000, then add meeting space when the economy improves.

Even if the project doesn't raise taxes, it still requires a referendum, Flanigan said. City ordinances require a referendum for any building or equipment spending that exceeds 7 percent of the city's general fund budget. That limit is $237,000 this year.

The city tentatively chose June for a referendum, but that's not final, Thompson said. The council must approve referendum wording by its April 20 meeting to make the June target, he said.